Weekly Business Insights 11/22/2023
Planning for 2024 Projected Supply Chain Cost Increases, Market Disruptions. Healthcare costs to jump 7% in 2024: PwC.
Planning for 2024 Projected Supply Chain Cost Increases, Market Disruptions
Vizient's proactive approach to healthcare supply chain challenges involves leveraging data and insights to tackle projected cost increases and disruptions in 2024. Factors like economic changes, sustained higher costs for raw materials, and ongoing supply chain disruptions are contributing to a forecasted 2.9% supply chain rate increase. Strategies include using an assurance score for better visibility into supply risks, aiding providers in proactive adjustments, and offering support during disruptions with market briefs and response measures. This comprehensive approach aims to ensure supply chain resilience and minimize the impact on care delivery.
Healthcare costs to jump 7%in 2024: PwC
The PwC Health Research Institute forecasts a significant 7% rise in healthcare costs for 2024 due to high inflation, escalating wages, and various expenses, compounded by workforce shortages. This projection affects medical services and prescription medication costs for payers' group and individual plans, impacting health plan premiums. Factors contributing to this increase include costly gene therapies, weight loss drugs, hospital consolidations, and physician negotiations for higher contract rates. Provider profit margins are decreasing as payers negotiate prices with hospitals, and rising drug prices further strain health plans. Despite some positive influences like biosimilars entering the market and care shifting to outpatient settings, these countermeasures are overshadowed by the inflationary pressures. Although health plans invest in cost management initiatives like value-based care, the projected rise in national plans is anticipated to have an overall deflationary impact on medical cost trends.
Employers foresee a significant 7% rise in healthcare costs for 2024 due to various factors like chronic health conditions, catastrophic claims, and soaring prescription drug prices. This projection, consistent with the previous year, reflects the ongoing impact of inflation, supply shortages, and increased healthcare expenses passed on to employers. Drivers for the cost increase include delayed preventive care during the pandemic leading to later, more severe diagnoses and increased utilization due to chronic conditions. However, despite these trends, the projection suggests that employer strategies might not majorly shift the burden to employees, with only a small percentage planning to raise deductibles or premium contributions. Instead, employers aim to manage costs through control initiatives like prior authorization and disease management, showcasing a focus on cost containment strategies. The emphasis remains on evaluating benefit packages to ensure value for the expenditure on healthcare benefits.